Power shoppers are a cohort of consumers who spend over £360 per year on cross-border purchases. First of all, any doubts about cross-border demand is dispelled by our recent survey of 22,000 consumers in 11 countries, Global Voices 2021: Cross-Border Insights, which found that 68% of shoppers made ecommerce purchases outside of their home country in 2020.
The research also looked at the cross-border buying habits and expectations of these consumers. Power shoppers, unlike other high spenders, are potentially more brand loyal and valuable, as they tend to purchase directly from brands, department stores, specific retailers, and luxury retailer sites, rather than marketplaces such as Amazon and Zalando.
Underscoring their well-established digital native-level of comfort with buying online, Millennials represent 40% of the overall cross-border market and 47% of high spenders. When we look more closely at the power shoppers, 22% of Millennials exhibit that magic combination, compared to 17% each for Gen X and Gen Z, and just 10% of Boomers.
When we pull back and look at power shoppers collectively, they are more often married with families compared to the overall market.
The family lifestyle may account for higher spending across key verticals. Survey respondents who qualify as cross-border power shoppers buy twice the number of products across a range of categories - Clothing - 39% v. 25%, Health & Beauty - 29% v. 15%, Cosmetics - 26% v. 12%, Luxury Goods - 26% v. 12%, Fragrance - 25% v. 12% and Skin Care - 26% v. 11%
Overwhelmingly, cross-border power shoppers prefer to use credit or debit cards for purchases, similar to overall consumers. However, they are twice as likely to use flexible or alternative payment methods. Twenty-three percent use Global Wallets, such as PayPal, Apple Pay, etc., compared to just 12% of general consumers, 22% use bank transfer (vs. 12%), 12% use Buy Now, Pay Later (vs. 8%) and 12% use COD (vs. 6%).
While money is always a consideration, power shoppers are no more motivated by cost than general consumers when considering cross-border purchases. However, they are more likely to look to other countries for wider variety or more unique products they can’t find locally. They are also far more likely to become loyal customers based on their overall satisfaction with the buying experience.
They more often cite positive reviews, flexible delivery options, clear refund policies, brand recognition, and familiar payment methods as factors when deciding to buy online. When buying cross-border, localisation also matters. In addition to viewing a website in their language, they expect prices to appear in their local currency and import charges stated upfront to avoid surprises.
Where are these power shoppers shopping? In our survey, US brands and retailers attracted 51% of cross-border shoppers. While UK-based sites sold to 20% of international customers.
Of the countries spending the most annually on cross-border purchases, Russia, Mexico, and Turkey top the list. These emerging markets offer significant opportunity for cross-border retailers who can serve the demand. By offering a familiar shopping experience that provides the same level of service and convenience customers expect when shopping locally, brands can win customers and open new avenues for growth.
Clearly, understanding these power shoppers is key to unlocking cross-border business growth possibilities.
But the factors going into a purchasing decision are becoming increasingly complex. With such rapidly changing market conditions – spurred by a global pandemic that upended the industry and caused lasting change – predicting consumer behaviours is hard. Some useful generalisations however do emerge from our survey.
In terms of demographics, because of the preponderance of millennials in the power shopper cohort, they represent the highest value segments for most retailers and brands when it comes to cross-border ecommerce. Smart brands will prioritise Millennials’ engagement whilst keeping a close watch on Gen Z as they establish more buying power and clout in the global market.
Power shoppers expect a wholly localised cross-border shopping experience, with appropriate languages, local payment methods, currencies, and items that can’t be found on other sites. To keep customers coming back, provide a positive shopping experience that conveys, estimated delivery dates, no surprise charges, easy local returns/return to store, clear refund policies and reviews.
However, do not forget the power of variety and product availability, both crucial in attracting high-value shoppers. And remember that big spenders spend more time with brands and are more loyal. They tend to shop more frequently on brand websites and with more confidence than on marketplace sites. Curating a direct-to-consumer experience that exceeds expectations is the way to attract and convert them.
Mark Kirschner, Chief Marketing Officer, eShopWorld